most EA are great … on historic data due to curve fitting.
Hello.
Yep: unfortunately this is indeed the case. This is also the reason that many trading systems based on moving averages alone ALSO “fall out of favor” at one point or another. Bill Williams’ “Trading Chaos” is but one example. He “swore by” the 13-day EMA “shifted” 8-days (the “Alligator’s Jaw” or “Balance Line”). Why??? Because it was tested using MANY MANY MANY years of historical data on a “super computer” (his words not mine) and this was found to be “optimal” AT THE TIME. That was HOW MANY YEARS AGO??? Take a good look at the performance of this system over the past few years and it’s another “story” altogether unfortunately. But then think about things that STILL work and are STILL relevant e.g. new 20-day highs or lows or high swing points or low swing points??? Different “story” altogether. Alright: this is not to say that trading systems (maybe “filters” is a better word for them) based on moving averages are TOTALLY irrelevant. The 200-day moving average and the 50-day moving average are as relevant as ever. But that’s NOT because they’ve been “curve fitted”. It’s because most all traders (well: most all equity and commodity traders anyway) are very aware of these two (very significant) moving averages. It’s not coincidence that they will always indicate support or resistance and that there is almost ALWAYS a “bounce” off of them in either direction.
Anyway: the point is (once again) that there’s NO point in PAYING for some EA or other application that’s going to simply “run in the background and churn money”. Well: not unless you’ve got MILLIONS and can “lay your hands” on one of those fancy “algos” that the big investment firms use for high frequency trading. You’re not comparing “apples with apples” here. If there WAS an EA that has “stood the test of time and high profitability” then those huge investment firms would have saved themselves a LOT of $$$!!!
There is ONLY ONE WAY to make money in THIS business and that is to LEARN TO TRADE. It’s NOT that difficult. Believe me. And if you don’t have the time or the inclination: then get somebody else to trade on your behalf. And by that I don’t mean to subscribe to some or the other “signal service (signal provider)” or “trade mirroring” or PAMM/MAM accounts either because to date I’ve yet to actually meet somebody that’s made money consistently this way. Just a quick search of these forums here will give you some insight into this i.e. I’ve read many a thread where people are watching their account balances just going down and down and down and wondering when in the HELL their “fund manager” is going to get out of the trade or where are the stops (or even worse: why are there NO stops being used). That type of thing. I get many a query from people that just don’t have the time to trade (let alone the inclination). So: they’re offered a minimum fixed return (which, I’m not going to lie to you, is less than what’s possible if trading for yourself but, well, it’s way better than what’s offered by banks and the like i.e. as with everything in life there’s a “trade-off” I guess). And, well, once again: “free education” is available. You just have to look for it is all.
Regards,
Dale.
The majority of recent comments suggest that an ea that can properly manage risk and produce profitable results does not exist. Yet there is no proof of this, just a regurgitation of what is or is not possible. Professional traders don’t usually think this way (of what is not possible based solely on hearsay and assumption).
What I suggest the OP and any serious seeker do is evaluate a method or complete system to see if it can reproduce the results you are looking for in a logical (easily explainable) manner. I can say from my experience that profitability is much more about managing risk than prediction.
Hello.
Hmmmnnn… I wouldn’t be so sure that such an EA exists. Put it this way: there’s MORE proof that they don’t exist than there is that they DO exist. Take a good look around here at some of the “horror stories” and you’ll see what I mean. Then again: one could very well argue that those that have CONSISTENTLY profitable EAs (and EAs that don’t require “tweaking” “every other day” after sustaining some pretty “nasty” losses) are keeping them to themselves (although I don’t see any logical reason for them doing this UNLESS they’re selling them which, again, would make me question their profitability in the first place). WHO knows. I don’t. Yes: maybe I’m being unfair here i.e. writing an EA or buying an EA is not something I’ve ever considered (and I guess the fact that I’m no big MetaTrader fan has had a lot to do with this too). I mean: I actually ENJOY trading and “staring at screens” (not all day though mind you).
But I’ll say this: you are 1 000 000% correct when you say that “profitability is much more about managing risk than prediction”. This seems to allude most people. Larry Williams (for one) has been quoted as saying that “it’s not how much you make in this business that will ensure that you’re a profitable trader but it’s how much you DO NOT LOSE”. As a matter fact: a little known “factoid” is that some or the other group of traders (Chuck Le Beau “& Co.” if memory serves me correctly) took trades PURELY at random (I forget whether it was a “coin toss method” or if they used a dartboard and NO: I NOT joking here either). Believe it or not: overall they were profitable but for only TWO reasons. The first: MANAGING RISK. The second: the “correct” placement of stops. Alright and to the best of my knowledge and recollection: they were not HIGHLY profitable. But SOME profit is WAY better than outright overall losses!!! But alright: that’s ALSO not “trading” in the true sense of the word either.
As is well known around these parts: I advocate “pure technical trading” with NO subjectivity, attention to news data releases, analysts, and the like. But if I’m to be totally honest: I think that one does INDEED over time develop some type of “knack” for just looking at a chart, something just doesn’t “look” or “feel” right, and I’ll look for another trade on another instrument. THIS cannot be programmed (at least: I don’t think it can anyway). But for those that I aid and assist and train: let me be clear on ONE thing though. Once you have INDEED selected your instrument THEN you MUST follow your technical trading system “no matter what”. There’s the “pure technical trading” that I’m always “on about”.
Anyway: the points that I’ve tried to make on this thread REALLY amount to nothing more than my expressing my opinion that $5 000 is “decent” trading capital to begin with. With that type of “cash on hand” one is WELL capitalized, can MANAGE RISK, and can sustain a good few consecutive losses before starting to “sweat” (and this stops them from “system hopping”).
Regards,
Dale.
[QUOTE=iamimortal;372273]not realy lots of money but i got 50k $ to invest.[/QUOTE]
hi, take a look at my performance in attached file if you like to invest with me.
The reason why us mentors, give education on elements of trading but never tell how we actually trade to the T, is because some marketer will just package it up and sell it. One out of every 5 on a webinar are marketers looking for a product.
All I can say is trading is not that hard once you see the big picture of the market and start ignoring the minor details.
If you micro manage trades you will get micro results. I have only ever let 5 traders on to my trading methods and that they paid for, and my method of trading is not unique. Any other mentoring I have done is just some basics on moving averages and fibs, nothing that will make you money.
EA’s are really good under the right circumstances, however you need to program your EA to quite before you do. Certain Conditions all EA,s do fail. Ask Lehman brothers or Merkh.
Good morning and great post dennis14685.
I love this part:
LOL!!!
Hmmnnn… I not too sure about this one. I’ll say this: when I started out some years ago I also used to wonder why people (experienced and professional traders) write books and host seminars (which they charge for and in some cases the fees ain’t small either) (Larry Williams is a good example) and I think I posted about this back then (and I am talking about a GOOD long while ago). My “take” on this back then (and I know that others believe this to this day) was that these people couldn’t make money trading so they write books and host seminars to make a living. Well: that’s a very simplistic view of things. I realize that now. Alright: I’m not talking about your “Average Joe Soap New Trader” who has been trading for a few months, has basically “gotten lucky”, and is now trying to bolster their capital by offering training etc. for fees i.e. this does happen (and is happening) I’m sure. But I’m talking about those that have “been around the block” a few times and know what they’re talking about. I can tell you from experience that having an additional income (whether it be fixed employment or other income from a business venture or the like) makes a HUGE difference to a persons trading and psyche. Why??? You become VERY “picky” or “choosy” as to which trades you take as opposed to taking EVERY trade where there is even the REMOTEST chance of it being a profitable trade (in some cases even “seeing” a signal generated by a technical trading system that, in hindsight, “wasn’t really a signal”). I guess (and in other words): it “takes the pressure off”. I’ve mentioned Larry Williams (above) and he’s (obviously) been asked why he goes around the world hosting seminars and writing books and the like. The income that he generates from these endeavors he refers to as “Christmas Money” (in one of his books). And there are many other well known and professional traders that will tell you the same thing (Jim Wykoff being another and if I can find the link about this in an email from him with reference to an article written by him I’ll post it here). What’s more: having to withdraw trading profits at the end of every month just to “pay the bills” makes it that much harder to grow the account e.g. once you’ve withdrawn profits to “pay the bills” you have to reduce your lot sizes again (it’s ALMOST the same as incurring a loss as odd as that may sound). Anyway and aside from this “residual income” (for want of a better word): trading on your own “gets to you” emotionally too. I went through a stage where I myself thought that I was “losing my marbles”. I’d get up in the morning, make a cup of coffee, “meander” on over to my PCs (home office), and sit there until it was time to go to bed (or worse still: until I just couldn’t stay awake anymore). I can tell you that it did NOTHING for my trading. And not having any interaction with other human beings for years (other than on weekends)??? Well: it sure doesn’t do anything for a person’s personality either. To make matters worse: even the weekends were “mess ups” because I was a total and utter “misery” until the markets opened again late Sunday night (alright: THIS has not REALLY changed though to be honest!!! LOL!!!). I guess what I’m saying is that not EVERYONE that does OTHER things e.g. hosts seminars or writes books (and charges for the same) is a “snake oil salesman” or “con artist”. I’ve also found (ironically) that when you “give” something away then people (well: people here in South Africa anyway) “figure” that “if it’s for free then it cannot be worth much”. I’m not sure about this but I’m now of the mindset that “hey: if you cannot beat them then join them”. Of course: there are one’s own costs to take into account too. I mean: it’s one thing helping others to NOT “lose their shirt” in this business at no charge to them. But it’s another thing altogether doing this when it’s costing YOU money.
Showing others how I (we) trade “to the T”??? I’ve no problem with doing that and do it on a daily basis. One thing I do NOT do though: I don’t “publish results”. Why??? Not because I’m NOT making money or because I’m worried about the IRS (SARS in my case). But I try my best to get traders to take the trading systems that I trade and present on my forums and actually LEARN to trade them, take the TIME to backtest them THEMSELVES, and see whether or not I’m “talking nonsense” or not. ANYBODY can “publish” WHATEVER results they choose to and in some cases such “published” results are not worth the “screenshot” or “report” presented (just look at the “Rent-A-Signal” scam for example)!!! My point is: if somebody is not prepared to take the time to learn and familiarize themselves with the details (even the BASIC details will do to begin with) of the technical trading system then how interested can they be in learning to trade??? How “committed” can they be (one thing I DO know is that this business DOES require “commitment”)??? Of course: I’m always “around” to “take things further” and “hold hands” with the trader i.e. sometimes it’s NOT QUITE as easy as simply reading a book or details about a technical trading system and simply going about the business of trading it without at least SOME background knowledge (that may or may not be detailed by the developer of a technical trading system) and this is where I try to “fit in”. And frankly: there are people that can trade and there are people that cannot no matter HOW hard they try. As I noted somewhere around these parts: I’ve seen it IN PRACTICE where a certain group of traders can be trading the identical trading system, at the very same broker, with the same amount of starting capital, and some will make money and others will not. What’s different??? Their “psychology” and the inability to “control themselves” (and it’s not for want of TRYING either). I’ve ALWAYS been the one to say that “anyone can trade” (always believed in the “Turtle Trading Experiment”. Well: that’s quite possibly not STRICTLY true (anymore). Yes: given a fixed set of rules, a decent technical trading system, and some “coaching”, it’s possible. But not even the best “teacher” can stop a new and inexperienced trader from “experimenting” on their own and this is where the problem comes in.
In spite of my “ramblings” above: I’ve been trying to make THIS point for YEARS now too!!! LOL!!!
Regards,
Dale.
This I don’t understand though:
The poster is quoting an ORIGINAL post ("$50 000 to invest") posted LAST YEAR already (on a thread which was started by someone willing to “pony up” $5 000 for a profitable EA)??? What’s with that (this)???
If “Mr. $50 000” is still around: believe me you have WAY WAY WAY enough capital to trade with, manage risk, and STILL make some REAL money (monthly). This is something that I believe is important and one of the reasons why I “bang on” about NOT starting with minimal amounts of capital etc. With $50 000: you should be able to at very LEAST make anywhere between $5 000 and $10 000 per month ON AVERAGE PER ANNUM (and anything over and above that would, of course, go toward growing your account). Of course: it depends on your living expenses and lifestyle as to whether or not that’s enough for you. But this is the problem: people get into this business, open a live trading account with either the minimum amount of capital required or EVEN SLIGHTLY more e.g. $1 000 and then expect to live off of their profits!!! Simply put: “it ain’t gonna happen”. Not in THIS lifetime and not in THIS business IN SPITE of all of the “bullsh*t” advertisements put out there by unscrupulous brokers and so called “fund managers” and the like. It’s “pie in the sky”!!! It’s also the reason why most all minimally funded trader lose. They start out “just fine”, never risk a certain amount per trade, follow all of the “generally accepted rules”, and do alright. But (and here’s where the problem comes in): very soon they find that “hey: even although my PERCENTAGE gains are great in MONETARY terms I’m wasting my time”. So what happens??? “All caution is thrown to the wind”, they begin taking bigger risks, and in only a VERY few consecutive losing trades, they’re “gonners”. Their logic (quite understandably to be honest): “well: I’ll take bigger risks NOW, build up my trading capital QUICKLY and THEN, when in MONETARY terms I’m making enough to warrant my time being spent here, I’ll revert BACK to managing risk and following the generally accepted rules”. I’m SURE I don’t have to tell you what the pitfalls are of THIS type of “thought process”!!!
If you’re not (for whatever reason) in a position to learn to trade and trade your own funds: then find a broker or investment firm that will guarantee you a certain fixed return on your investment and leave it at that (and while such guaranteed fixed return may be nowhere near what’s ACTUALLY possible WITHIN REASON it’s WAY better than entrusting your money to some or the other “lone trader” who can produce successful HISTORICAL results but will inevitably present you with “the usual disclaimer” i.e. “past performance is not indicative, nor a guarantee, of future results” which, to me, is like saying “well: things have been great thus far but if things go awry in the future well, then, it’s your problem not mine”).
Regards,
Dale.
Oh this is too funny (given the ORIGINAL TOPIC of this thread).
Do you believe in coincidence (I for one don’t)???
THIS arrived TWO MINUTES ago via email (yeh: I get LOADS of “junk” but sometimes some “nuggets” arrive and are just too good to keep to yourself):
The most costly trip to Paris all thanks to a Forex ROBOT!
Regards,
Dale.
P.S. Sorry for all the advertisements i.e. just ignore them. It’s the “article content” that counts.
Yes thats spot on, having income from mentoring saves monthly transfers from the trading account and covers most monthly expences. Thats a win win. Awesom posts Dale keep em coming